FBI targets tech company Baicells, founded by Huawei veterans

Baicells Technologies, founded in 2014, has supplied telecommunications equipment to 700 commercial mobile networks across all US states since 2015. Recently, the US Department of Commerce and the FBI began investigating Baicells for possible national security risks. Sources say that the FBI turned its attention to the company back in 2019, and in 2021, FBI agents summoned one of the executives of Baicells North America for questioning.

Even as sanctions have all but destroyed the U.S. business of Chinese tech companies Huawei and ZTE, Washington remains wary of Chinese telecom equipment, suspecting its manufacturers of espionage. “Testing this issue would be at the top of my list,” said John Carlin, the Justice Department’s former chief national security attorney.

This month, the Pentagon added Baicells to a list of 134 companies collaborating with the Chinese military, without providing any evidence or additional comment. Inclusion in this list has no legal force, but may damage the reputation of companies. “We strongly disagree with the Department of Defense’s decision and intend to appeal,” a Baicells spokesman said.

Washington accuses China of intercepting sensitive data and hacking telecommunications networks. US government experts say that Chinese intelligence agencies, having gained remote access to routers and base stations, can intercept or interfere with their traffic, disrupt their functionality or carry out cyber attacks. While there is no direct evidence that any of Baicells’ equipment was misused, US officials say this particular technique has been used by a wide range of Chinese-backed hacking groups around the world.

US federal authorities were concerned that wireless Internet service provider KGI Communications had deployed Baicells base stations in King George, Virginia, near the Naval Surface Warfare Center at Dahlgren, where hypersonic weapons are being tested. The supplier was advised to abandon its plans.

In 2023, FBI officials took notice of Las Vegas’ plans to expand its existing network with 82 more Baicells base stations. As a result, Las Vegas canceled the contract and turned to a US supplier instead.

Image source: Baicells

Beijing Baicells Technologies Co was originally founded in 2014 by several former Huawei employees, most of whom have now left the company. In 2016, Baicells opened an office in Plano, a suburb of Dallas, where Huawei’s US research and development unit Futurewei was headquartered.

A Baicells spokesperson says the company has never had a business relationship with Huawei. At the same time, four former employees with direct knowledge of the Chinese management of Baicells claim that the company is managed from China, and any management decisions must be approved by a special board.

To assuage U.S. customers’ concerns about Baicells’ ties to China, in recent years sales managers have been instructed to say equipment was made in Taiwan. However, customs data shows that 92% of Baicells equipment shipments to the US from 2018 to July 2024 were made in China or Hong Kong, and only 8% in Taiwan.

The US cyber defense agency CISA, part of the Department of Homeland Security, published a report in 2023 about the vulnerability of Baicells Nova base stations. CISA oversees a list of 16 critical infrastructure networks, which include water, energy, financial services and telecommunications, among others. In total, CISA issued two security alerts and four notices about vulnerabilities in Baicells routers and base stations, designating at least five of them as “critical.”

A subsequent analysis by Censys found that between 28 and 186 Baicells base stations in the US were still running vulnerable firmware, potentially putting them at risk of hacking. Commenting on the investigation, a Baicells spokesperson responded by saying the company has “taken positive steps to ensure the safety of our products and is proactively addressing any safety concerns.”

Chinese Embassy spokesman Liu Pengyu once again called on Washington to stop using cybersecurity issues to blame China. Baicells Technologies Chairman Sun Lixin said the company’s North American division is open to cooperation with any requests from the US government, noting that the company’s products “do not pose any security risks.”